Plans to open a Kerry Global Technology & Innovation Centre in Ireland to serve the EMEA region are on-track and scheduled to open in early 2015.
Other centres and regional headquarters for Asian markets in Singapore will be completed in September, supported by Kerry Regional Development & Application Centres in China, India and Thailand.
Interim management report
The EMEA announcement came during Kerry Group’s interim management report forthe half year results ending June 30, 2014.
Stan McCarthy, CEO, Kerry Group said notwithstanding adverse currency movements, adjusted earnings per share increased by 5.8% to 115.2 cent.
“Our Kerry Global Technology & Innovation Centres continue to drive industry-leading innovation. We remain confident of delivering 6% to 10% growth in adjusted earnings per share in 2014 as previously guided,” he said.
McCarthy added Dairygold maintained market share in the dairy spreads sector and Cheestrings continues to advance brand development in Continental European markets.
Kerry Foods launched Yollies – a yoghurt lolly on a stick last month, now available across the UK and Ireland.
The range is geared towards school children and for healthy food on-the-go. They come in three flavours; raspberry, strawberry and apricot.
Speaking about the financial results, McCarthy said group revenue at €2.9bn reflects underlying sales growth (USG) of 3.2%. Revenues on a reported basis were 1.9% lower reflecting the adverse translation impact of currency movements relative to H1 2013.
“Continuing business volumes grew by 2.7% and pricing increased by 0.6% in a relatively benign input cost inflationary environment,” he added.
“Volume growth and trading performance in the ingredients and flavours markets improved in Q2 relative to Q1. Continuing business volumes increased by 4.2% and net pricing increased by 0.6%.”
Demand for clean-label
Among the various markets, demand for clean-label, low-calorie, low-sodium, nutritional/healthy snacks continues to drive development across America.
Good growth was achieved through clean-label products in North America. Latin American markets, in particular in Central America and the Andean region, provided opportunities for culinary technologies. In North America performance in the culinary sector was assisted by Wynnstarr Flavors acquired prior to year-end 2013.
Further progress was achieved in realignment of business structures and customer service capabilities in EMEA markets in line with Kerry business models.
“Consumer spend in regional developed markets remains constrained, impacting industry development. While Kerry continued to successfully expand its footprint in EMEA developing markets, trading proved more challenging due to currency related inflationary pressures and political unrest in some zones,” said McCarthy.
“Reported revenues at €791m reflect underlying sales growth of 1.3%. Continuing business volumes grew by 0.9% and pricing increased by 0.4%.”
In May, the group opened a Regional Development & Application Centre in Durban, South Africa to serve its regional customer base in Sub Saharan Africa.
Despite weaker market conditions in Asia-Pacific developed markets Kerry maintained solid growth and strong momentum in the region – benefiting from the increased group resources deployed to market development. Reported revenues of €392m reflect underlying sales growth of 12.2%. Continuing business volumes increased by 11.5% and net pricing increased by 1%.
Lipid technologies performed well in Asian nutritional market segments. In the foodservice sector Kerry’s branded beverage offering including Da Vinci, Caffé D’Amore and Big.
According to the financial figures, development in Australia and New Zealand was adversely impacted by currency movements and intense competition. Significant development was achieved through premium infant nutrition applications in regional developing markets, particularly in China.
Savoury and dairytechnologies performed well in regional developing markets but performance in Japan and ANZ was weaker due to market specific issues.